12 month consumer price index data for Houston, nation

Core inflation at 2.3% in ‘09

Wendy Natt, Jul 15, 09.

New figures from the Consumer Price Index for All Urban Consumers (CPI-U), recently reported by the US Bureau of Labor Statistics, showed that the cost of consumer goods declined by 1.4 percent during the 12 months ending in June 2009, but that the CPI-U rose at a seasonally adjusted annual rate (SAAR) of 2.7 percent in the first 6 months of this year.

The Greater Houston Partnership (GHP), who reported these figures in a recent Houston Economic Indicators email update, says that the national decline is not a sign of systematic deflation, rather it is largely a consequence of volatile energy costs, “which were down 25.5 percent over the year, more than offsetting increases of 2.1 percent in food costs and 1.7 percent for all items less food and energy (core inflation).”

GHP says that we can expect a few more months of “negative headline inflation” before over-the-year declines in energy costs are reduced to the point that they no longer offset all other costs so dramatically.

Food and energy costs aside, national core inflation in the first half of 2009 was 2.3 percent, placing it just above the purported comfort zone of Federal Reserve analysts, according to GHP.

In Houston, the average consumer price increase for items typically included in core inflation calculations was 3.5 percent over the same time period, well above the national average.

See the full list of GHP’s Houston Economic Indicators for July 15, 2009.